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Viet Nam among world’s most attractive retail markets

VGP – Viet Nam’s domestic trade has constantly maintained stable growth momentum at a high level. (always 1.5-2 times higher than the GDP growth rate).

07/22/2020 17:14

Viet Nam among world’s most attractive retail markets

Specifically, total retail sales and consumer service revenue registered rapid growth, estimated at 11.2% per annum. 

Rapid growth

As stated by the MOIT, Viet Nam has become one of the most attractive retail markets globally over recent years (ranked 6th among the 30 countries with potential and attractiveness for retail investment). 

The country’s average retail sales and consumer service revenue per capita increased by 2.65 times in the past decade, from VND19.3 million in 2010 to VND51.2 million in 2019, contributing approximately 8% of the nation’s GDP. 

During the period of 2016-2019, Viet Nam’s total retail sales and consumer service revenue grew rapidly at an estimated 11.2% per annum. Between 2006-2018, the average growth rate of total retail sales of goods was always 1.5-2 times higher than the country’s average GDP growth rate.

The emergence of the system of FDI businesses and the fast growth of some large domestic enterprises have contributed to modernizing the domestic retail industry in the past few years, according to the ministry.

In particular, e-commerce, supported by electronic payment methods, has become a strong development trend in recent years with an average annual growth rate of over 27%.

Until now, about 50% of foreign-invested enterprises’ retail market share in Viet Nam is not through stores but through online sales, with the number of businesses having e-commerce transactions having increased by more than three times in the last 10 years (around 259,000 businesses in 2019) and the participation of over 55% of the population, with the average annual expenditure of US$600 per person.

Promoting domestic consumption

In the near future, the MOIT will continue to strengthen trade and domestic consumption promotion, in addition to accelerating the development of e-commerce 4.0, the implementation of the campaign “Vietnamese people prioritize the use of Vietnamese goods”, and the circulation of Vietnamese goods through distribution systems, both at home and abroad.

As forecast by the ministry, in the second half of 2020, the pandemic situation in Viet Nam remains well controlled, while business and production activities continue to take place normally. 

These favorable conditions, together with the efforts of the Government, ministries, sectors and localities to facilitate trade promotion and stimulate tourism and consumer spending, will give a strong boost to the purchasing power of the domestic market and create a driver of growth for the total retail sales and consumer service revenue in the remaining months of the year.

By Vien Nhu